If that includes you, Laith Khalaf, UK financial analyst at brokers AJ Bell, offers some simple guidance: “Those who wish to gain exposure to cryptocurrencies should only do so with a small amount of money that they are willing to lose,” he suggests. This includes Australians, who are increasingly getting in on the act: recent Roy Morgan research has revealed that 5%, or more than one million adult Australians own at least one cryptocurrency. And at its May AGM, the legendary Berkshire Hathaway vice-chairman and investor, Charlie Munger, said Bitcoin was “disgusting and contrary to the interests of civilisation”.Ĭomments such as these, however, fail to put off millions of aficionados around the world from trying to make money from cryptocurrencies, including Bitcoin. Last month, Jerome Powell, the chairman of the US Federal Reserve, described cryptoassets as no better than “vehicles for speculation”. If your financial plans revolve around capital preservation – hanging onto what you’ve got – then the volatile behaviour of cryptocurrencies is most definitely not for you. Nowadays, they pre-occupy the thoughts of governments and major financial institutions alike and divide opinion as to whether they are essentially Ponzi schemes that need to be severely regulated, or are simply volatile asset classes for investors who enjoy a high-stakes gamble. You don’t need to follow the financial world that closely to know that cryptocurrencies have become one of its biggest stories in recent years. Source: eToro First, a crypto wealth warning If you’re familiar with Bitcoin but less au fait with its closest rival, here’s what you need to know about Ethereum including why, one day, it could still become the dominant player on the cryptocurrency stage. However, in more recent times, the term ‘cryptocurrency’ has evolved to encompass a decentralised financial system (DeFi), a highly volatile asset class that can nose-dive or surge on the back of a Tweet, a space for bad actors to steal vulnerable investors’ identities and money, a mode of asset diversification, and a form of digital payment.Įthereum once had an effective market capitalisation of around $250 billion, however, has recently lost more than $100 billion in value due to the crypto slide of May 2022 and is now sitting at around $135 billion in market cap. In the truest sense, cryptocurrencies are a digital means of exchange which use cryptography as a form of security. *Crypto assets are unregulated & highly speculative. What Is Ethereum (ETH) And How Does It Work? While we work hard to provide accurate and up to date information that we think you will find relevant, Forbes Advisor does not and cannot guarantee that any information provided is complete and makes no representations or warranties in connection thereto, nor to the accuracy or applicability thereof. The compensation we receive from advertisers does not influence the recommendations or advice our editorial team provides in our articles or otherwise impact any of the editorial content on Forbes Advisor. These “affiliate links” may generate income for our site when you click on them. Second, we also include links to advertisers’ offers in some of our articles. This site does not include all companies or products available within the market. The payments we receive for those placements affects how and where advertisers’ offers appear on the site. This comes from two main sources.įirst, we provide paid placements to advertisers to present their offers.
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